Infographic - mining market intelligence April 2013

23 April 2013

Seasonal declines seem to be on schedule for April, with weak demand for copper in particular indicating that growth may be slowing down. The commodities market for April 2013 is neutral, but if the last three years are anything to go by then a decline should be bargained for.

March 2013 was a particularly strong month for US markets, with each one reaching a 52 week high. Seasonal correlation comparisons for April, although not steadfast, do suggest a decline. Courtesy of Visual Capitalist, this month's market analysis infographic draws particular insight from the rise and fall of copper. While historically copper has been a good growth indicator, a recent divergence from the SPX is raising eyebrows. Click on each image to see it full size.

Monthly technical analysis - a closer look at the S&P 500

Jeremy Salsburg of Silver Lining Asset Advisors has commented on the S&P500 stating that, "If the SPX closes below its 50 day moving average (1531), we will be moderately bearish".

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Copper tactical trade - eyes on the SPX / copper disconnect

Historically copper (a long standing barometer of economic growth) and the $SPX exhibit a high positive correlation; however, they have recently diverged. When copper performs well it indicates increases in cyclical growth or expectations for growth. Copper hitting YTD lows suggests there is less demand and that growth is slowing down, which in turn forecasts lower levels for the S&P 500.

Additionally, increasing warehouse levels of copper indicate extremely low demand as companies continue to stockpile reserves, which will continue to suppress the price of copper further.

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The smart money - investors predict a fall in copper prices this April

Significantly high levels of managed money short positions in copper futures contracts indicate that institutional investors are forecasting that the copper price will continue to fall in the near to medium term. Producer / merchant activity supports this conclusion. If companies believed this was the true low for copper they would want to buy as many futures as possible in order to lock in this low purchase price.

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Market dashboard - a close look at your economic indicators

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Commodity trends - the commodities percentage change over the month before